New Currency for a new Country

kabayiri

What about selling Scotland's oil in Sterling, with some arrangement with rUK (including a handling fee, of course)?

A lot of Scottish trade is with rUK anyway, so there would still be price stability for these trades.

Yep, I know it sounds like quasi-independence, but isn't there a case for a period of fiscal prudence?

Generali

IveSeenTheLight wrote: »

I'm more than happy for you guys to be as constructive as possible in your discussions.

For me, the currency issue is largely irrelevant as the worlds population has very little say in which currency they use.

The UK uses the Pound, Europe mainly uses the Euro, US uses the Dollar and when you emigrated to Australia, you had little choice in that you now use the Australian Dollar.

Whatever currency is derived under Independence, Scotland will prosper. There are many similar sized countries that do well and don't have the same assets Scotland has.

I personally am not concerned whether I pay my mortgage in the Pound, Euro, Dollar, Groat or whatever. I think this is all political gamesmanship to project negatively on what cannot be achieved rather than focussing on what can be achieved.

Long before any discussions on referendum, I argued for Politicians to be more positive in the campaigning rather than negative campaigning. I'd much rather here from what each party is striving to achieve and progressively going forward. The electorate can then assess how successful they were and whether they believed they were the right party to bring them forward.

[edit]

Thanked your post before your edit, but it's a pity your edit has resulted in this.
Nevermind
[/edit]

I don't really want to put you on ignore but if you're just a wum like that idiot Graham then there is no point in doing anything else. I'll take you off again but if you just want to stick a little pin in my leg to prove a point then I have no interest in that.

Generali

kabayiri wrote: »

What about selling Scotland's oil in Sterling, with some arrangement with rUK (including a handling fee, of course)?

A lot of Scottish trade is with rUK anyway, so there would still be price stability for these trades.

Yep, I know it sounds like quasi-independence, but isn't there a case for a period of fiscal prudence?

It makes no difference whether they sell the oil in Euro, pounds or anything else that they don't control. That wouldn't amount to fiscal prudence.

Fiscal prudence, which would be an admirable thing for any Government, would be to seek to run a roughly balanced budget. As Yes has said they want to build a Sovereign Wealth Fund (SWF) that implies that they want to run a budget that is in surplus.

Presumably, they believe that the benefits from becoming independent would be great enough for current spending plus the additional benefits they wish to provide plus covering the gap between spending and taxation plus something to put into the SWF. I have my doubts but we all have an opinion.

IronWolf

I too think setting up its own currency is the way to go forward. The unofficial pound has too many drawbacks and they would struggle to sell bonds, the official pound ties them to UK monetary policy which flies in the face of becoming independent!

No much better to create their own currency, which will be difficult but doable. Im sure they would find some people willing to buy bonds in their new currency. Have no idea how they would transition but its obviously possible - just look at what countries joining the Euro do.

CLAPTON

purch wrote: »

I am sure the toilet paper issued by RBS/BoS and Clydesdale could still be used for exchange within the borders of Scotland, but it would be worthless anywhere else without agreement, and we would be spared the embarrassment of Scots yelling at shop assistants and bus drivers when in England that their note is "Legal Tender".................cos it won't be anymore.

actually, Scottish pounds aren't legal tender in England and no-one has to accept them

CLAPTON

kabayiri wrote: »

What about selling Scotland's oil in Sterling, with some arrangement with rUK (including a handling fee, of course)?

A lot of Scottish trade is with rUK anyway, so there would still be price stability for these trades.

Yep, I know it sounds like quasi-independence, but isn't there a case for a period of fiscal prudence?

there can only be one world price for a barrel of oil of any given quality, irrespective of which currency is use


so if Scotland wanted to sell its oil in GB pounds ..no problem but it wouldn't be able to fix the price.


e.g if the pound price worked out (after conversion to dollars)less than the dollar price everyone would beat a path to your doors as you were under selling the product;
if the pound price was higher than the dollar price then no-one would buy from you.

Generali

IronWolf wrote: »

I too think setting up its own currency is the way to go forward. The unofficial pound has too many drawbacks and they would struggle to sell bonds, the official pound ties them to UK monetary policy which flies in the face of becoming independent!

No much better to create their own currency, which will be difficult but doable. Im sure they would find some people willing to buy bonds in their new currency. Have no idea how they would transition but its obviously possible - just look at what countries joining the Euro do.

Setting up a new currency is pretty simple. You ring up De La Rue who will take care of the printing of the physical stuff. You agree a sign (e.g. SCG) with the ISO lot. Get SWIFT & Target 2 connected up and pay a little bit in to CHAPS to keep the current infrastructure and get it changed to a bi-currency system. Not so hard.

If they need to sell bonds, they could easily do so in USD denomination. Many countries do the same and Scotland would have a ready supply of USD from oil sales.

CLAPTON

IveSeenTheLight wrote: »

I'm more than happy for you guys to be as constructive as possible in your discussions.

For me, the currency issue is largely irrelevant as the worlds population has very little say in which currency they use.

The UK uses the Pound, Europe mainly uses the Euro, US uses the Dollar and when you emigrated to Australia, you had little choice in that you now use the Australian Dollar.

Whatever currency is derived under Independence, Scotland will prosper. There are many similar sized countries that do well and don't have the same assets Scotland has.

I personally am not concerned whether I pay my mortgage in the Pound, Euro, Dollar, Groat or whatever. I think this is all political gamesmanship to project negatively on what cannot be achieved rather than focussing on what can be achieved.

Long before any discussions on referendum, I argued for Politicians to be more positive in the campaigning rather than negative campaigning. I'd much rather here from what each party is striving to achieve and progressively going forward. The electorate can then assess how successful they were and whether they believed they were the right party to bring them forward.

[edit]

Thanked your post before your edit, but it's a pity your edit has resulted in this.
Nevermind
[/edit]

the currency issue isn't about what currency you use for your mortgage it's about


- what happens if a Scottish bank fails
- how much does the Scottish government pay if it borrows money on international markets
- if a Scottish bank has a temporary liquidity problem how is that dealt with
- how are the savings of Scottish people protected.


uncle alex could have told you how this would be handled in the various currency option but he didn't do so.


many of these problems would disappear if canny Scots put all their savings in RoUK banks and let their own banking sector disappear.

kabayiri

Already, thanks to this (Gen's) thread, there has been more discussion here than I have heard on much of the televised debate on this subtopic.

This is slightly worrying is it not? Just how informed are the Scottish voters to potential practical issues such as these? The televised debate sounded more like electioneering.

purch

IveSeenTheLight wrote: »

For me, the currency issue is largely irrelevant as the worlds population has very little say in which currency they use.

The World's population has a huge amount of say in the currency they use, via the Government that they elect.

The decision that will have to be taken by the Scottish Government after they win Independence will have huge ramifications for the population, and if you or they think it is irrelevant at the moment, in a decade or more you could be ruing that indifference.